BANKING EXPECTATIONS FOR THE NEW CONGRESS Margaret Liu Senior Vice President and Deputy General Counsel Conference of State Bank Supervisors
Banking Expectations for the New Congress Day with the Superintendent Iowa Division of Banking April 16, 2015 Margaret Liu Conference of State Bank Supervisors
Overview The 114 th Congress by the Numbers The People The Issues
The 114 th Congress by the Numbers House Remains Republican-Controlled 245 Republicans; 188 Democrats; 2 vacancies Republicans gained 13 seats Largest GOP majority since World War II Senate Flipped from Democrat to Republican control 54 Republicans; 44 Democrats; 2 Independents (caucus with Democrats) Republicans gained 9 seats 4
People House -- Financial Services Committee Differences in leadership styles and philosophies Chairman Jeb Hensarling (R-TX) Ranking Maxine Waters (D-CA) Financial Institutions Subcommittee Chairman Randy Neugebauer (R-TX) Ranking Member Lacy Clay (D-MO) 5
People -- Senate Banking Committee Chairman Richard Shelby (R-AL) Ranking Member Sherrod Brown (D-OH) Financial Institutions Subcommittee Chairman Pat Toomey (R-PA) Ranking Member Jeff Merkley (D-OR) 6
The Issues -- Community Banking Mortgage Lending Supervision and Examinations Targeted Regulatory Relief Leadership Matters 7
Community Banking Mortgage Lending Relief from CFPB s Ability-to-Repay Rule Greater flexibility for balloon loans in rural areas (H.R. 1259; S. 871) Qualified Mortgage status for all mortgages held in portfolio (H.R. 1210) Basel III and Mortgage Servicing Rights Study and implementation delay (H.R. 1408) 8
Community Banking Supervision and Exams Exam Fairness and Reform Act (S. 774) Report and exit interview deadlines Independent appeals of material supervisory determinations through FFIEC Anti-retaliation Exam Cycle Raising the asset cap for 18-month exam cycle (H.R. 1553) Establishing 24-month exam cycle (H.R. 1233) Call Report Short-form call report (H.R. 1233) 9
Community Banking Regulatory Relief Gramm Leach Bliley Annual Privacy Notice Relief (H.R. 601; S. 423) Federal Reserve Small Bank Holding Company Statement Raise upper limit from $1 billion to $5 billion (H.R. 1233) De-Risking and Operation Choke Point Cutting off funding (H.R. 1413; S. 477) Regulators and account terminations (H.R. 766) 10
Community Banking Leadership Matters Federal Reserve Board Requiring at least one Governor with community bank or community bank supervisory experience Enacted into law, January 2015 Nomination of Allan Landon pending FDIC Board At least one member with State bank supervisory experience H.R. 1601 tightens existing requirement 11
Community Banking A Definitional Approach Challenge of defining community banks Challenges posed by solely using asset thresholds to define community banks Looks to asset size plus other qualitative factors: Local deposits; Local lending; Local management; Business model 12
Community Banking CSBS Initiatives CSBS-Federal Reserve Community Bank Research Conference September 30-October 1, St. Louis Integrating industry town halls, industry survey, and academic research https://www.stlouisfed.org/bank-supervision/2015-communitybanking-conference Cybersecurity Executive Leadership on Cybersecurity http://www.csbs.org/cybersecurity/pages/default.aspx Outreach events EGRPRA
Other Financial Services Priorities Relief for mid-size, regionals, and super-regionals CFPB structural and governance reform Cybersecurity Dodd-Frank oversight CFPB FSOC Ex-Im reauthorization Federal Reserve reform Housing finance reform 14
Key Dates to Watch May 31 -- Highway Trust Fund expires June 30 Ex-Im Bank authorization expires September 30 -- Federal government FY 2015 funding expires Late October/Early November -- Debt ceiling expected to be reached 15
Outlook Consensus still tough Possible compromises on corporate tax reform, trade, and infrastructure Possible financial services related legislation Community bank regulatory relief Raise threshold for designating BHCs as SIFIs from $50 billion to some higher number ($250 billion) or some qualitative assessment
Thank You